- After eight pandemic months, may be light at end of rental market tunnel
- Signed leases increased in October for first time since July
- Median rent for new Manhattan leases in October dropped more than -11% compared to last October
October’s rental market report for Manhattan was more complicated than most. The good news for renters and landlords alike…there were more new-signed leases for the first time since the severe rental impact of the pandemic was felt in July. The good news for renters and bad news for landlords…the median rent in October 2020 came in at $3,100 from $3,500 in October 2019, a drop of more than -11%. The bad news for landlords…the vacancy rate hit 6.14% or 16,145 available units, the highest vacancy rate in 14 years.
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(All of the above stats are thanks to The Elliman Report and Miller Samuel Appraisers.)
Jonathan Miller, CEO of Miller Samuel and author of the Elliman Report, noted that despite the hefty number of new-signed leases, “…there’s a whole suite of other metrics that are very negative…”
One of those metrics is that landlords have been highly motivated to lower rents and offer concessions to bridle the enormous number of vacancies. Lower rents and concessions such as a month or two or several months of free rent are working…renters are renting. The median rent is down to $3,100 from $3,500 one year ago and 60% of new signed leases included financial concessions equaling an average of 2.1 months of free rent that reduced concession-based median rent to $2,868/month, the lowest level of rent in +9 years.
Miller believes that lower rents and more concessions are here to stay for a while. He said, “So while new lease signings, lower rents and more concessions are good for renters, the circumstances driving them are not likely to recede quickly…(and)…that there is not going to be much change in the near-term…”
Check out this chart from the Elliman Report that indicates how leases, prices and concessions have changed from October 2019 to October 2020 in Manhattan:
New Rentals 10/19 10/20 Change
Median Price $3,500 $3,100 -11%
# new leases 4,236 5,641 +33%
Listing inventory 5,070 16,145 +218%
Vacancy rate 2.03% 6.14%
Rentals w/ Concessions
Median Price $3,409 $2,868 -16%
Market Share 37% 60%
Months of Free Rent 1.2 2.1 +75%
Manhattan Median Rents by Size
Studio $2,695 $2,245 -17%
One-bedroom $3,595 $3,064 -15%
Two-bedroom $4,671 $4,284 -8%
Three-bedroom $6,065 $5,489 -10%
Thanks to The Elliman Report, Miller Samuel Appraiser and The New York Times.